How Targeted Ads Started Watching Us All

Listen to this episode

S1: I was looking at this ad from 1958. It’s a print handout from Cadillac and across the top it says the moment you take the wheel, you will discover a motor car unexplored in craftsmanship and heritage.

S2: As you can readily see, the Cadillac Motor Car 1958 is a rare masterpiece and all the things that make a Cadillac.

S3: The people in the ad look prosperous and important to businessmen leaning in front of a Cadillac chauffeur, standing guard by one, and a glamorous woman in gloves leaning across a third. I came across that because one of the dealerships listed in it was O’Leary Cadillac, my grandfather’s dealership in Grosse Pointe, Michigan. But it’s a great example of this certain kind of advertising, broad, aspirational and selling. Anyone who saw it on, quote, an unforgettable motoring experience in the way it looks, rides and drives.

S2: This is Cadillacs biased. We hope that you will take the time to see and drive this magnificent new Cadillac very soon.

S3: That kind of advertising not only sold us on a certain kind of life, but also underwrote an industry.

S4: Advertising for the last almost 200 years has essentially funded the media revolution. That idea of a mass media format, that Siva idea.

S1: He teaches media studies at the University of Virginia.

S4: It’s the reason we have newspapers, a reason we have magazines, the reason we have television and radio that we don’t have to pay for.

S1: And podcasts. Podcasts. Yes, but all of that has changed over the past 10 years. Each of us has become a data point in a wholesale makeover of the advertising industry, part of something Siva calls the surveillance economy.

S5: This week on the show, how the transformation of advertising changed everything privacy, politics and the public sphere. I’m Lizzie O’Leary and this is what next TBD show about technology, power and how the future will be determined. Stay with us.

S1: You wrote this piece for Slate that used kind of the decade as its frame, the decade and in online advertising. But you started long before that, you started with the Don Draper mid-century advertising model. I guess I wonder why that like why did you pick this early 60s model and what does it tell us about today?

S6: You know, we look in 2010, a lot of us were watching Mad Men and a lot of us were watching Mad Men, not just for the sort of cultural and social nostalgia. And this notion like, oh, thank goodness, I have to work in an office like that. But we also were fascinated by this sort of culture of advertising. By every time Don Draper made a pitch, it was it was a non-event right on that show. Like he was really good at this.

S4: And and but he was acting in acting for describing an advertising world that had already died. This notion that creative people can come up with a dream that we will all aspire to and all of a sudden we’re all buying ivory soap or we’re all buying Lucky Strike cigarettes like that’s long gone. Everything in advertising these days is data driven, even if creative aspects like Geico commercials are still an important part of advertising, important part of our culture and probably the economy. The fact is targeting, making sure that you’re not. Missing the right potential consumers and that you’re not hitting too many of the wrong potential consumers and wasting money, that’s still crucial. And while that process, that shift to data driven targeting started as early as 2000 to when Google really started mastering it, it’s been this last decade where data driven advertising targeted digital advertising has completely taken over the advertising world to the point where by 2019, by last year. Advertising on Facebook and Google alone exceeded all other forms of advertising and spending in the United States. Really? Yeah. Yeah. That’s amazing. Think about that. Like Facebook, Google. Companies are just taking in all of this money.

S1: This is a huge concentration of ad spending, whereas advertising money was once spread across local and national publishers, billboards and radio stations. Today, the lion’s share is but just between those two companies. For CMA, this shift starts with Google and one of their earliest innovations.

S4: Google was invented in 1998 by a couple of p_h_d_ students in computer science at Stanford, and they just wanted to build something that could help people navigate this fast growing collection of documents called the Worldwide Web. Every day, millions of new pages will come up. And we didn’t have a good way of searching globally and systematically where it was all like indexes that human beings were put together for Yahoo! Or others. I graduated from college. Yeah, right. So they had no idea how they were gonna make money, right. So by 2002, they figured out, you know, we really kind of have to make money here at the venture capital gift is not going to last forever. And they sat down and met with a bunch of economists, mathematicians, and they came up with this ad auction system that would create these small, unobtrusive ads. They did not want their search pages overrun by ads, didn’t want to ruin the experience. They wanted the user experience to be key and easy and not annoying. And what they did was they decided, OK, we’re gonna have advertisers bid on search terms. So if you’re searching for shoes, all the shoe stores that want to be part of this auction are going to instantly bid for how much it will pay for a click. So if you’re sitting in Brooklyn or you’re sitting in New Jersey, maybe the combination of the local stores and the big Zappos and Amazons of the world are going to do this, too. Right. And, you know, of course, over time, Google knows your gender, probably knows your shoe size, probably shoe styles. You might get more specific things based on the knowledge. But the key insight was that there would be this auction for this term and the bid winner would only pay a penny more than the loser. That meant you never risked overpaying for winning a bid so you could bid like a thousand dollars.

S1: And the second place person bids 10 and you’re paying $10 million.

S6: Exactly. Exactly. Which takes a lot of the risk out of the situation. Right. Feel a lot more bolted to like bid a lot of money. Right. And this is great for Google because people just keep bidding a lot of money, but they’re convinced not being ripped off, which is great, but it gave great confidence to advertisers. Now they’re thinking, well, I have a choice. I can buy an ad in my local paper. I can target an ad based on interest on Google. And this was even before Google had all this data about our gender and our race and our politics and our interests and all that stuff. But now, once everyone signs up for G-mail, everyone signs up with Google accounts of various things. Then Google starts accumulating all this personal data, which Facebook did from day one. And Facebook really built its ad system in 2009.

S1: Once Sheryl Sandberg moved over from Google to Facebook, Sandberg took this core idea of an instant advertising option over to Facebook, using the platform’s extensive individualized data. By 2010, both big companies were using it. When we think about how this works, I guess I can see the appeal if you are, let’s say, a small shoe store in Brooklyn, to use your analogy. With a limited advertising budget, it makes sense, right? You want to target the people who might actually want your product. Has it been good for smaller company for a while?

S6: Is really good for smaller companies, especially before the big companies got in on Google advertising. Small companies really did well with Google advertising. I mean, the stories are somewhat anecdotal, but you know, in the early days before the Zappos and Amazon started dominating the ads and the big vendor companies, you know, they started dominating the ads. A local company could find a good audience for very little money on Google. That’s getting harder and harder to do. As Google became the advertising site of choice for big companies.

S1: This system of targeted ads. It’s the financial underpinning of the Internet we use today. It’s something we’ve come to accept. Scholar Shushannah Zubov given name to this commodification of personal behavior.

S7: It begins with these companies claiming unilaterally claiming our private human experience as their free source of raw material. She called it surveillance capitalism. The surveillance capitalists have tried to get us to believe that their practices are the inevitable outgrowth of digital technologies.

S1: One worry that I think a lot of people have is the privacy question how much these businesses know about us, how much they’re using the phrase surveillance. Capitalism has become famous. Do you think that’s an accurate phrase?

S6: Oh, yeah, it’s a it’s an accurate phrase. Surveillance is built into so many different commercial systems right now from the point of view, the interest of of safety. The interest of security. Right.

S4: The interest of crowd control. And in the interest of delivering advertisments to you or customizing products for you. Right. It’s just so cheap to know everything about everybody that it’s it’s almost commercial malpractice not to participate in this set of practices about about corporate surveillance.

S1: Do you do you fight this on a regular basis or are you just like AIDS everywhere?

S4: I haven’t figured out the right way to fight. Right. I want and you know. Yeah, but it’s so. Pervasive and so big and so powerful that all I see around us are attempts to shave off its sharper edges. And I haven’t seen a whole lot of policy recommendations that would get to the heart of the problem.

S1: The one place that is pushing back the hardest is is California, which has just put this new law into effect, which essentially says you should be able to ban the sale of your data. Is California leading the way or is it is it an outlier?

S4: Yeah, California is both leading the way and an outlier, which is basically its role in America as in everything from mileage standards on cars to emission standards to now privacy laws the size of California, the market size of California, the political power of California means that if California passes any sort of regulation, companies usually find it in their interest to universalize that set of practices across states. And so the California Consumer Privacy Act. It remains to be seen whether that’s going to strike at the heart of the problem. And one of the reasons is it involves it going to be operational. It requires a lot of awareness and activity by the consumer. You might care enough. To opt out of things, I might care enough to opt out of things, but you have to first know this about the system, you have to care about the system and you have to know you have an option. And that is still pretty hard to get people to realize.

S1: enmasse We’ve been talking about consumers, we’ve been talking about the advertising. The other side of all of this is a traditional advertising market that was devastated and you as a media studies professor have written about that as this was rising, what was happening to where all this stuff used to go?

S4: Yeah, right. So, you know, back in the Draper days and long before that advertising was necessary. Right. For if you have a company. People have to know that you exist or no one’s ever gonna come to your door. So you needed to get the word out somehow. The only effective way the only seemingly effective way was Dubai, an advertisment, radio, magazines, newspapers or even leaflets or billboards or just something to get the word out. But we had no data to show that any of this worked or that one thing worked better than another. It was really with the rise of of Google and then Facebook that now advertisers know whether their ads work. That makes sense. It makes sense to companies to know worth it, whether their ad works as they take all their money out of newspapers, out of local radio and out of magazines. And we see that all around us. We see unemployed journalists, underemployed journalists, underfunded journalists write The Baltimore Sun used to have a Moscow bureau. Newspapers in major cities had stringers, if not bureaus around the world. And they had investigative teams and they had people, columnists who wrote about bridge, local bridge. Right. I mean, not the best journalistic job, but like that’s the way that the role and newspaper would play, both in a culture and in our political awareness. Right. That none of that happens right now. A handful of big national newspapers can make money largely through subscriptions. Advertising was a good run for a couple hundred years. I don’t think we’re ever going to get back to that point where advertising can subsidize all of this different creativity and and content in a package like a newspaper or magazine.

S1: Look, obviously, as a journalist, I feel incredible pangs and loss when that happens. But also as a journalist, I have to say, like maybe it wasn’t a great business model. And if you are that vulnerable to someone coming along and doing it better, maybe you weren’t doing a great job.

S6: Well, I mean, they were doing the best they could with what they had. Right. And it was great for a while. We will look back and see the middle of the 20th century as an anomalous point in human history. And unlike in much of Europe, we didn’t need the state to create state media, to do our state funded media to do it right. Or we thought we didn’t. Well, now we have to actually step back and say, wait, maybe the BBC is not a bad model. Maybe we need something like that. Maybe we need something like public interest television, like we have in the Netherlands and in France to to at least give us this baseline of responsible journalism in our lives because other sources might not be around very long.

S1: I think about this thing that Charlie Wardell from The New York Times said in our very first episode, which is we’ve uploaded our political discourse into an advertising platform.

S4: Yeah. Yeah. You agree with that? You know, we kind of did that before, like we were comfortable with doing it with the Chicago Tribune and The New York Post and Newsday. Right. That’s where politics happened for much of the 20th century in the early part of 21st century. So and those are advertising platforms itself. But uploading it into a surveillance platform that carefully collates for us, gathers for us certain content and certain advertising and massages our experience of the world. That’s a whole new level. That’s a whole new level.

S6: So we have to unite all of these conversations about privacy, about the health of the public sphere and the health of journalism, about the ability to limit propaganda and about the concentrations of power of these very big companies, very rich companies, very politically connected companies.

S8: Siva VAIDYANATHAN, thank you so much. My pleasure. Siva Vida often is a professor of media studies at the University of Virginia. You can find his piece, The Decade in Advertising on OK. That’s the show. What next? TBD is produced by Ethan Brooks, hosted by me. Lizzie O’Leary and is part of the larger What Next family. TBD is also part of Future Tense Partnership of Slate, Arizona State University and New America. If you missed what next episode on Wednesday, I strongly suggest you go back and listen. It’s about why it’s so easy for presidents to take military action without approval from Congress. And it gives some crucial context for the U.S. strike against Kassim Suleimani. Mary and her team will be back on Monday. Thanks for listening. Talk to you next week.